Secret tapes become focus of May Town court fight

Defense in fraud suit says Metro Council members, others were recorded

Mar. 3, 2013

Jeff Zeitlin / FILE / FOR THE TENNESSEAN

Written by

Joey Garrison

The Tennessean

Jack May / FILE / THE TENNESSEAN

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Three years ago, as Metro Council members listened to why they should vote for one of the most divisive development plans in Nashville history, the prominent developer on the other end of the telephone secretly recorded their conversations.

Jeff Zeitlin used Web-based services to compile 130 recordings, totaling about 40 hours of discussions with at least 14 council members, as well as attorneys and business leaders. The conversations, mostly in 2010, centered on the issue of the day, a project Zeitlin and others were pushing: May Town Center, the failed $4 billion mega-development that would have turned grassy fields in the secluded Bells Bend community into a 550-acre mixed-use campus some likened to a second downtown.

Zeitlin and investor William Kantz had teamed with an additional partner, wealthy businessman Jack May and his family, the namesake of the project. But today, with the development team fractured, May is trying to use the phone conversations to fight breach-of-contract and fraud allegations in a lawsuit the two former May Town partners filed against him more than a year ago.

In a memorandum filed Feb. 13 asking that the claims be dismissed, May’s defense points to Zeitlin’s practice of secretly recording public officials, alleging it violates the “unclean hands” doctrine –– a legal argument that says wrongdoings of plaintiffs should prevent them from receiving relief.

It also accused Kantz of creating “clandestine recordings.”

Kantz’s attorney, Jim Roberts, acknowledged as much but said Kantz only recorded conversations with Jack and Frank May, Jack’s brother, and a fourth member of Bells Landing Partners. And in a serious accusation that steers far from the legal infighting, Roberts said his client and Zeitlin only started recording after Jack May made threats against their lives. He said he didn’t think police were ever notified of the threats.

May’s filing contends that taping public officials and other individuals without their knowledge represents “unconscionable, immoral and wrongful conduct.” Though state law permits one-party consent in recording conversations, May’s defense nonetheless calls the practice in this instance “inexcusable,” “terrible,” “repugnant and wrong” and “beyond underhanded.”

The brief, which asserts that May had no knowledge his partners were secretly recording conversations, claims Zeitlin and Kantz at one point started to demand “large sums of money,” threatened to sue and claimed they had “explosive” recordings that would embarrass the May family.

Zeitlin: 'Two sides to every story'

Zeitlin, contacted by The Tennessean, declined to discuss details of the recordings or why he systematically taped his conversations.

“I don’t think it is appropriate to comment on pending litigation, but I can tell you, there are two sides to every story,” Zeitlin said after conferring with his attorneys. “We will tell our side of the story in our court papers in the near future.”

A hearing is set for April 5.

Existence of the recordings, which were produced during discovery, is indisputable. But they aren’t publicly available because exhibits aren’t filed with the court.

By early 2010 — when the first recording was captured — May Town leaders had turned their attention from the Metro Planning Commission, where the development had stalled in a 5-5 vote, to the 40-member council, where the project needed 27 votes for approval because of the planning commission setback.

Ultimately, the council in March 2010 voted to defer the May Town project indefinitely.

The parties discussed the project, speculated about votes and offered their impressions of Jack May, Mayor Karl Dean, Tony Giarratana and others, according to the brief.

Giarratana, a well-known Nashville developer, had been brought on as the project’s spokesman. The memo goes on to reference taped conversations with Nashville attorneys James Weaver, Harris Gilbert and David Lewis.

Roberts, Kantz’s attorney, said the recordings are a “red herring,” and that the unclean hands doctrine doesn’t apply in a legal dispute over whether a contract had been breached.

“I think the truth that’s going to come out is that William and Jeff began making these tapes because Jack May was threatening to kill them and harm them, and to kill their families,” Roberts said.

In an email, George Nolan, May’s attorney, said this reasoning doesn’t make sense.

“If Kantz made secret recordings because Jack May allegedly made threatening remarks, then why did Zeitlin and Kantz secretly record Metro Council members and prominent local lawyers?”

Nolan called the accusation “a thinly veiled attempt” to draw attention away from the “unseemly conduct” of recording secretly. He declined to elaborate on the details of the tapes, referring further questions to the brief.

The legal dispute

The Bells Bend partnership formed in 2007. An October 2011 suit filed by Kantz, which started the legal dispute, claims Jack May violated that agreement two years later by declaring himself managing partner and bringing on new partners without consent.

While proponents embraced May Town as an opportunity to compete with Williamson County for corporate relocations, critics called the proposal harmful sprawl that would taint one of the county’s environmental jewels.

Two months after Kantz’s initial suit, Zeitlin filed his own suit against May and his family that included charges of fraud and breach of contract. It alleges Jack and Frank May cost him “tens of millions in damages” and accuses the Mays of lying to Tennessee State University, which was promised $400,000 and land for research as part of the project.

Kantz and Zeitlin consolidated suits in March 2012. By that point, May had already countersued, claiming the May family had spent $27 million in acquiring Bells Bend land, while Kantz and Zeitlin had contributed nothing yet received more than $2 million in management fees and payments. It also first made mention of the recordings.

Shift in focus

In its latest brief, May’s defense has pivoted fully to phone conversations involving one of the most politically contentious issues ever to go to the Metro Council.

“I was never given any indication by him or anyone else that there was a recording,” said Councilwoman Barry, who said she recalls talking to Zeitlin but not the details of their conversations.

Matthews, the council sponsor of the zoning change whose district includes the May Town property, said Zeitlin didn’t inform him at the time that he was secretly recording their conversations.

“We talked primarily about the project,” Matthews said. “When it comes to that, I don’t have anything to hide.”